Michele Hanson on the wonderful world of European carbon permits

I was trying to get to grips with the European carbon permit scheme, carbon offsetting and trading the other day. First I read about it myself, then I read it again, each sentence separately, twice over. Then I had a little scream and a tea break and then, luckily, Rosemary came round. So I read about it out loud to her, a sentence at a time, nice and slowly, two or three times over each sentence, but we still couldn’t get the hang of it.

“Is it about the clean-air act?” asked Rosemary. “Don’t write that,” she shouted. “You’ll make me sound stupid.” But she isn’t stupid. I swear it. She’s fearfully clever. So we slogged away at it, eventually we thought we’d just about got it, until we came to the bit on the “over-allocation of permits” to large companies under the European Union Emissions Trading Scheme. Here we hit a giant stumbling block. Because if some huge companies have been mistakenly given nearly a million more credits than they need, why don’t they just give them back?

That seems to be the general rule. In our experience, if some goon overpays you, you must still pay them back. I accidentally robbed a French bank once when I was 19. I popped in to change some Turkish currency which I happened to have, wasn’t quite sure of the exchange rate, and came out with loads of money. Marvelous. Naturally, I whizzed off and spent it. But waiting for me at my hotel was a cross note from the bank manager. Would I please return the money at once. They had overpaid me. I couldn’t. I had no money left. And it was their fault. But I had to pay. If I couldn’t, then my father must. He would be blacklisted and banned from France unless he did. So he coughed up.

If social services overpays your benefit, they will claw it back from your plastic cup of pennies even as you sit eating dry crusts in the gutter. The state is frightfully strict about over payments. Three years ago my mother died. I told the pension persons straight away like a good girl. I sent them the death certificate, I begged them to stop paying, but they went on, overpaying and overpaying for months, into her post office account. I left it in there, so that they might keep it, but they refused. I must take it, then I must pay them back. You are not allowed to profit from another clot’s mistake.

Unless you’re in the bizarre world of carbon emissions, then it’s Alice in Wonderland. An overpayment isn’t a mistake, it’s a free gift. You don’t give it back, you can hoard it or sell it on and profit hugely. The end of the world is just another business opportunity. “Managing emissions is one of the fastest-growing segments in financial services in the City … with a market … which could grow to €1 trillion within a decade.” Carbon “could become the world’s biggest market overall.” And we thought carbon emissions were meant to be a problem.

Read Michele’s column in full in The Guardian 16.09.08